These are intriguing times in the world of finance. Leverage, inequalities in wealth distribution, the struggles of small businesses, taxation effects, tariff wars, the impact of FinTech, and other related factors make the financial sector interesting for both industry practitioners and academic researchers.
With this backdrop, Indian School of Business (ISB) once again played host to some of the leading researchers in Corporate Finance at its serene Hyderabad Campus on July 25 and 26, 2019. ISB’s Centre for Analytical Finance has been organising the Summer Research Conference (SRC) for 16 years running now, and the event has established itself on the global calendar of research conferences owing to its long lineage and also the quality of researchers and papers it attracts.
ISB’s Dean Rajendra Srivastava began proceedings reiterating the selectiveness in the paper selection process at the Conference. Out of 124 submissions, only 12 had been accepted this year. This ratio of just 10% stands out in comparison to other research conferences. Moreover, and as highlighted by the Dean, papers presented at the SRC have an average 43% chance of acceptance for publication in top research journals. This too is higher than other conferences. More importantly, active audience and presenter participation provides authors with an excellent environment to gain feedback and perspective on their work.
The Dean also elaborated how the topics discussed in this forum impact policy measures in the future. Specifically, he mentioned the importance of research in finance on infrastructure financing, which will necessarily involve the convergence of engineering, finance, policy, strategy and economics. A consensus view emerged at SRC 2019 about this interdisciplinarity being the hallmark of future research in the field.
The six sessions of the Conference spread over two days were divided into Banking, Capital Markets, Debt and Externalities, Entrepreneurship and Regulation, Finance and Technology and Political Economy. The common theme was the highlighting and possible remediation of inefficiencies in processes, market practices and regulation. The pain points that the research papers tried to remedy included income inequalities, high transaction costs, illiquidity, information gaps for investors and regulatory gaps.
Each researcher presentation was followed by a presentation by a discussant and audience questions. This structure allowed for deeper questioning, suggestions for improvement and improved understanding of the research findings and methodologies. Presenters were thus enriched with enthusiastic and constructive feedback on their methodologies and conclusions.
The presentation of papers was followed by a keynote address by Professor Amit Seru from Stanford University. His discussion centred around the growth of the shadow banking industry in the USA, where this category now controls the majority share of both personal loans and residential mortgages. Professor Seru’s analysis showed how regulation in the post GFC 2007-09 era has stifled lending by mainstream banks and how technology-led shadow banks have stepped in to fill the void.
The National Stock Exchange sponsors the best paper award for the Summer Research Conference, which consists of a cash prize of USD 5,000 and a certificate of merit. The best paper award committee, with inputs from the audience poll, adjudged “Supranational Supervision” by Rainer Haselmann, Shikhar Singla and Vikrant Vig as the winner.
Key areas of consensus across the sessions and papers were that industry and academia need to find ways for modern finance to reduce inequality, promote innovation, improve transparency and make regulation simultaneously less onerous and more effective. The insights were particularly useful considering that a significant part of the current turmoil in financial markets globally emanates from a combination of these factors.
About the Centre for Analytical Finance
The Centre for Analytical Finance (CAF) was established in the year 2004, with a mandate to produce high-quality research, create research databases, organise conferences and workshops and train next generation of researchers in the area of finance. Through its Conferences, Workshops and Researcher’s Training programmes, the Centre has created a forum for academicians, regulators and industry professionals, to discuss the latest issues and research. The Centres’ association with the distinguished scholars of global repute and top industry practitioners makes it one of the premier research centres in South-east Asia.